Lawmakers scrutinize $68B high-speed rail plan

SACRAMENTO (AP) -- A day after a highly critical report on a $68.4 billion high-speed rail proposal, Democrats who control the California Legislature said they remained committed to the project and the chairman of the authority that would oversee construction said it's still a risk worth taking.

On Wednesday, lawmakers began evaluating the latest proposal from the California High-Speed Rail Authority in Senate and Assembly hearings. They are considering Gov. Jerry Brown's request to sell about $2.6 billion in voter-approved bonds to begin construction.

The Legislative Analyst's Office on Tuesday urged lawmakers to reject the plan because it relies on highly speculative financing.

Dan Richard, chairman of the rail authority board, urged lawmakers Wednesday not to forego $3.3 billion in federal matching money available for the project. President Barack Obama's administration has offered the money for construction of the first segment in the Central Valley.

The latest business plan trimmed last year's cost estimate of $98 billion but leaves it well above the $45 billion figure given to voters in 2008 when they approved selling nearly $10 billion in bonds.

Brian Weatherford, an analyst who wrote the report criticizing the latest funding proposal, said lawmakers are being asked to approve funding "while some of the details still aren't worked out, which increases the risk."

Richard countered that the report only looked at the continuing risks of building a 520-mile system linking Northern and Southern California, and failed to consider the state's infrastructure needs in the coming years.

"There is a risk that what we have to do to maintain mobility will cost more. I only ask that we balance those risks," he said.

The latest proposal for the system linking San Francisco to Anaheim estimates completion in 2028 and relies extensively on using commuter rail tracks to cut costs.

Richard was subjected to intense questioning Wednesday by Democrats on a Senate panel, but party members still appeared inclined to support the project, despite a series of reports that have questioned its financial backing, ridership estimates and leadership.

John Vigna, a spokesman for Assembly Speaker John Perez, D-Los Angeles, said Perez believes California should capitalize on historically low construction and labor costs now.

"There's obviously a lot of head-banging issues still to be worked out, but I think the commitment on the part of the Democratic caucus is still 100 percent there," he said.

Alicia Trost, a spokeswoman for Senate President pro Tem Darrell Steinberg, said Steinberg backs the project and will soon lay out a plan for the Legislature to take it up.

In the Assembly committee, Weatherford testified that he is concerned that $42 billion of the project's funding, or more than 60 percent, would come from still-unidentified federal sources. Republicans who control Congress also are staunchly opposed to high-speed rail funding.

Lawmakers in the Senate drilled Richard with funding questions, particularly over how the state would be able to connect the Central Valley, the state's fastest-growing area, to the Los Angeles area, the state's most populated area.

Sen. Alan Lowenthal, D-Long Beach, said he's concerned about getting enough money to connect Bakersfield to the Los Angeles basin once the state spends a third of the voter-approved bonds and federal funding on the first stretch in the Central Valley, from Madera to Bakersfield.

"Are you assuming now that we're going to get $12 billion to $13 billion from cap-and-trade?" Lowenthal asked, referring to the rail authority's proposal to use funding from California's new greenhouse gas emissions program if federal funding doesn't materialize.

Richard said there are opportunities to develop real estate around train stations and generate revenue from offering right-of-way for solar and wind energy development.

"We are going to continue to aggressively pursue federal money," Richard said. "I don't mean to be glib about this, but my hope is that as we move past the political season, we might be able to find bipartisan support again."

Richard, who served for 12 years on the board of the Bay Area Rapid Transit System, said most transportation projects are not fully funded decades in advance. The proposal calls for the line to be built in segments, with funding identified for each ahead of time, he said.

"It is just part and parcel of the transportation world that people don't know all these things ahead of time," he said. "We believe the entire program has value and will continue to have value, and we will not build any new legs unless we have the dollars."

More than a dozen people testified for and against the rail proposal at the Assembly hearing. Several Central Valley residents questioned whether the latest plan complies with the ballot measure voters approved in 2008.

At that time, the project was estimated to cost $45 billion while linking San Francisco and Los Angeles. The latest plan scales back building new high-speed tracks in favor of a so-called "blended" approach that uses existing commuter lines.

Sen. Doug LaMalfa, R-Willows, and former Republican congressman George Radanovich submitted language last month for a statewide ballot initiative tentatively titled "Stop the $100 Billion Bullet Train to Nowhere Act," which would give voters another opportunity to vote on high-speed rail.

LaMalfa also is seeking to get the measure on the ballot through the Legislature, which is not expected to approve it.

A separate measure to eliminate the high-speed rail authority, filed by an environmental activist, has been cleared to gather signatures.